Essay - ORDER OF PROGRESSION IN ANALYZING CONTRACT PROBLEMS

Question 1

What is the order of progression for contracts remedies?

Answer 1

1. Damages (expectation, consequential, liquidated)
2. Restitution (money restitution)
3. Specific performance
4. Special remedies if applicable: Rescission, Reformation

Question 2

What are damages in contract?

Answer 2

Money awarded for Injury to the plaintiff arising out of a breach of contract by the defendant.

Question 3

What are the 3 types of contract damages?

Answer 3

1. Expectation Damages
2. Consequential Damages
3. Liquidated Damages

Question 4

What are expectation damages?

Answer 4

This is the benefit plaintiff expected to get out of

the contract at the time of formation. how much they got-how much they expected to get)

Question 5

What are consequential damages?

Answer 5

Special damages that are foreseeable at the time the contract was entered into. (importance of time in contract, or its a condition)

Question 6

What are Liquidated Damages?

Answer 6

These are damages specified in the contract.

Question 7

For liquidated damages clauses what is the 2 part test to see if they are valid?

Answer 7

First look to see if damages are very difficult to ascertain at the time of contract formation. If yes, then it would be invalid.
Second look to see if it was a reasonable forecast of what damages would be. If the amount is excessive it would be a penalty and be invalid

Question 8

What if there is a clause that says “that one can get either actual damages or liquidated damages”?

Answer 8

This is an invalid clause, delete it. Give them actual compensatory damages.

Question 9

What is restitution in Contracts?

Answer 9

Money restitution: Benefits unjustly retained by the defendant when there is a void or unenforceable contract, or where the plaintiff chooses not to sue on the contract, permitting recovery in quasi contract

Question 10

Can plaintiff as the non-breaching party get restitutionary damages for property/money given to, or services rendered for, defendant?

Answer 10

Yes, for the value of the benefit

the value of the recovery may be greater than the contract rate.

Question 11

Contract for land, price = $100,000. Plaintiff, the breaching party, after paying 30% of the purchase price, defaults. Can plaintiff get any restitutionary damages? Under the traditional view? the modern view?

Answer 11

Traditional view: no recovery
Modern view: recovery is allowed, But Cannot be greater than contract rate and is reduced by any damages suffered by defendant as a result of the breach.

Question 12

What is specific performance?

Answer 12

Order to the defendant to specifically perform the

contract.

Question 13

What do you need to show to get specific performance?

Answer 13

(If Phil needs to specifically perform he needs) Viagra to Satisfy Inadequacy For Dudes

1. Valid contract- definite and certain terms
2. Satisfaction of conditions/performance by the plaintiff,
3. Inadequate- an inadequate legal remedy,
4. Feasibility- feasibility of enforcement,
5. Defences- and no defenses

Question 14

1. What do you ask to see if there is a valid contract?

Answer 14

Are the terms of the contract sufficiently DEFINITE AND CERTAIN?

Question 15

What constitutes satisfaction of performance by the P in a contract?

Answer 15

already performed, ready and able to perform, or excused from performing

Question 16

(are the remedies Inadequate?

Why would damages or money restitution be inadequate in contract?

Answer 16

Money Is Sometimes Inadequate if Unique
1. There may be a multiplicity of
suits
2. There may be an irreparable injury (remember uniqueness as well)
3. Damages may be too speculative
4. The D could be insolvent
5. Plaintiff may seek to recover a unique chattel or it’s land.

Question 17

(are the remedies Inadequate?)

Why would replevin be inadequate is contract?

Answer 17

1. Defendant can post a bond.

2. The sheriff may be unable to find the property.

Question 18

Is a specific performance decree FEASIBLE?

Answer 18

1. Too much supervision
2. No jurisdiction over parties
3. negative injunction may be innapropriate (non-compete clauses)

Question 19

What are the defenses to specific performance?

Answer 19

1. Laches
2. Unclean Hands
3. Freedom of Speech
4. Hardship

Question 20

What isLaches?

Answer 20

The effect of the passing of time. Has the plaintiff’s inaction encouraged or allowed the defendant to act to her detriment?

Question 21

What is unclean hands defense?

Answer 21

Plaintiff must come into equity with “clean hands.” Must be related to the transaction in the suit.

Question 22

What is freedom of speech defense in contracts??

Answer 22

First Amendment rule against prior restraint.

Question 23

What is hardship defense in contracts?

Answer 23

In a suit to specifically enforce a contract, a court of equity may refuse to enforce a contract in which there is inadequate consideration (low price) and there are onerous terms.